Humanity is facing a crisis of moral leadership - men and women of character who can choose wisely and well in the difficulties, dilemmas and complexity of contemporary business and government.
One of the biggest risks we face today is an assumption that because people share or subscribe to our corporate values, that they in fact share our moral perspective. Enron, LIBOR, AWB, unanswered questions at Note Printers Australia, and any number of examples would indicate immediately that is not the case.
The public travails of St John’s College and its students throw into stark relief the need to ask questions of potential employees to gain an insight about their moral outlook. It would be foolish of any organisation to assume that academic prowess equates with sound character.
Many commentators attribute the GFC to a general loss of moral consciousness and the divorce of markets and morals. But such a loss involves people and their actions, not some amorphous being called the market. Moral failure occurs in an individual - like Nick Leeson at Barings - or a group of individuals like the senior executives at Enron. And moral failure exposes firms to potential sudden and catastrophic collapse, as these examples demonstrate.
The character of individuals, and the moral frameworks and perspectives they bring to the firm, are crucial to brand, reputation, and potentially survival.
The academic disciplines undertaken by students at St John’s undoubtedly run the gamut of courses offered at Sydney University. This once esteemed College is educating the doctors, lawyers, engineers, leaders and managers of tomorrow.
Yet at the same time, the personal disciplines being pursued by students at St John’s appears to run the gauntlet of assault, bullying, misogyny, harassment, lying and vandalism. Georgie Carter publicly masquerading as a first year student to fight the allegations has inadvertently become the face of the problem, since she was outed as a third year student and a member of the 2012 house committee. A moment’s thought before going on national television posing as a ‘fresher’ would have indicated her lie would be uncovered.
Reports indicate that her actions resulted from a plan hatched by the committee. Is this another proof point about the moral failure at the College, where some students seem oblivious to the consequences of their actions?
Academic success provides an entrée into leading organisations, as firms compete each year for the best and the brightest from our universities, launching them onto well defined career paths. But is academic achievement the best marker?
There is no doubt that intellectual horsepower is a critical component for success. But character is just as important. Character is intimately linked to our moral compass, which guides us through moral dilemmas and safely past those obstacles where we can stand for something or fall for anything.
When a firm adopts a set of values they need to be sure that these are more than mere words, and that the associated behaviours are clearly understood at every level of the organisation. Shared corporate values do not mean shared moral perspective. For example, we can both agree profitability is important, but can have very different views about what constitutes acceptable behaviour to achieve that profit.
What could happen if a graduate of Sydney University, among the top percentile of their course, who has just spent three or four years at St John’s College, joins your firm? Their experience may have taught them that vandalism, assault, lying, bullying, covering up and harassment are acceptable. They may have learnt that rules are made to be broken, responsibility is to be avoided, and that if something goes wrong the best defense is sticking together, going on the attack, and then winning control of the governing body.
Your firm’s values may be very similar to those espoused by St John’s, which include: “Fostering a positive ethos that values and respects individuality, leadership, contribution to College and community life and rewards the achievement of results.” While the staff and students at St John’s may well ascribe to these values, what matters are the beliefs and behaviours that surround those values.
To the casual observer it appears that some students have deeply flawed beliefs about what constitutes community life and effective contribution to that, how rewards are won, what leadership means, and the relationship between individuality and peer pressure. A chasm seems to separate the reported culture from one that fosters ‘a positive ethos’.
Moral risk is perhaps the greatest risk facing organisations today. To assume that people joining the firm will act in the right way when confronted with a moral dilemma is to expose the firm to considerable risk. The moral compass of new hires could be so out of kilter that the way they live those values could seriously undermine the brand and reputation of the firm.
And if you employ someone with a broken compass, you are unwittingly releasing a moral cancer inside the firm. The risk of catastrophic failure makes this issue too big to ignore. But in the meantime, it would be wise to ask new hires - at every level - how they have navigated the moral dilemmas and complexity of life to date.
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